Gold & Silver Daily

Ed's Critical Reads

Apr 25, 2015

Worst Drop in Core Durable Goods Since December 2012

Having missed expectations for 5 of the last 7 months, Durable Goods New Orders jumped 4% MoM in March - the biggest jump since the July Boeing aberration all driven by a 112% surge in defense Aircraft new orders. Not surprisingly the Department of Commerce tried to pull this trick off in late 2007 in a last gasp desperate attempt to mask the arrival of the US recession then.

Durable Goods New Orders (ex-Transports) fell 0.2% MoM (missing expectations of a 0.3% rise) for the biggest YoY drop since 2012, some -1/9%, and under the covers it is ugly - Capital Goods New Orders non-defense, ex-aircraft have now fallen for 7 straight months, missing expectations dramatically (-0.5% vs +0.3% exp.). These numbers have never fallen for this long a period without a recession.

Durable Goods New Orders Ex-Transports... never fallen for this long without a recession.

This must read Zero Hedge piece appeared on their Internet site at 8:44 a.m. Friday morning EDT---and today's first news item is courtesy of Dan Lazicki.

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Dear CFTC... Here is Today's Illegal S&P 500 "Spoofing"

Dear CFTC commissioners:

Following this week's first in a long series of articles showcasing the ongoing manipulation in the S&P courtesy of E-mini spoofing, we are delighted to inform you that even though you heroically used a whistleblower's tip to capture the sole Flash Crash mastermind, Nav Sarao, five years after a flash crash which your peers at the SEC incorrectly claimed was the work of a small Kansas City-based mutual fund, the manipulation - as you called it - of the S&P 500 continues.

By way of example, here is some very clear evidence (courtesy of Nanex) showing "spoofing" - the very charge that Sarao is being scapegoated on - occurring twice in the space of a few minutes this morning...

This brief Zero Hedge article was posted on their Internet site at 1:17 p.m. EDT yesterday afternoon---and it's another offering from Dan Lazicki.

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In an Unrigged World: Here's How a Record S&P Close Was Manufactured

Judging by the action today, all that mattered today was 2117.39 - that is the S&P 500's previous closing record high from March 2nd. One glimpse at the charts below and the VIX-slamming is evident (especially at the close) as each time it came close to losing the record high, a miraculous deep-pocketed volatility-seller stepped in...

Look at the open in VIX too!  Welcome to the new normal.

This tiny Zero Hedge piece from yesterday appeared on their Internet site at 4:19 p.m. EDT---and I thank Dan Lazicki for his third offering in a row.  The two embedded charts are definitely worth your time.

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Gold Monkey-Hammered, Crude Clubbed As NASDAQ Surges

Amid the 'glorious' earnings last night, NASDAQ is on its own today, surging to higher highs as The Dow and S&P are unchanged to down. As this exuberance exudes, gold and silver are being smashed lower... which is odd given the ECB's threat to pull Greek financing. Crude prices are also tumbling post-Durable Goods.

This short chart-laden Zero Hedge piece appeared on their website at 10:09 a.m. EDT yesterday while JPMorgan et al were putting the boots to the gold price.  It's another story courtesy of Dan Lazicki.

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Santelli Exchange: Banks---and the war on paper money?

CNBC's Rick Santelli discusses investing in banks and analyzes cash in an electric society---and he doesn't pull too many punches.

This 3:09 minute video clip appeared on the CNBC website around 10 a.m. EDT on Monday---and the stories from Dan just keep on coming.

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The Death of Cash: Could negative interest rates create an existential crisis for money itself?

JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn’t want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a “balance sheet utilization fee” of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far.

Pause for a second and marvel at how strange this is. Banks have always paid interest to depositors. We’ve entered a new era of surplus in which banks—some, anyway—are deigning to accept money only if customers are willing to pay for the privilege. Nick Bunker, a policy analyst at the Washington Center for Equitable Growth, was so dazzled by interest rates’ falling into negative territory that he headlined his analysis after a Doors song, Break on Through (to the Other Side).

In recent months, negative rates have become widespread in Europe’s financial capitals. The European Central Bank, struggling to ignite growth, has a deposit rate of –0.2 percent. The Swiss National Bank, which worries that a rise of the Swiss franc will hurt trade, has a deposit rate of –0.75 percent. On April 21 the cost for banks to borrow from each other in euros (the euro interbank offered rate, or Euribor) tipped negative for the first time. And as of April 17, bonds comprising 31 percent of the value of the Bloomberg Eurozone Sovereign Bond Index—€1.8 trillion ($1.93 trillion) worth—were trading with negative yields. (Although dollar interest rates are higher, JPMorgan Chase’s balance sheet utilization fee fits the pattern: In today’s low-rate world, the only way it can shed deposits in response to new regulations is to go all the way to less than zero.)

This longish Bloomberg article showed up on their Internet site at 6:00 a.m. Denver time on Thursday morning---and I thank Norman Willis for his first contribution of the day.

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"I’m Not Crazy, I’m Scared" - Why For One Trader, This Time it is Different

The SPX flirted with all-time highs. The NASDAQ Index made 15 year highs; Chinese equities, and so many other equity indices are flying. Bonds sold off this week, but the German 10-year yield is still ~17bps, the U.S. 10-year yield unable to get beyond 2%, and Greek bonds had a two-day rally that would be truly impressive if it wasn’t on volume that made it just an exercise moving wide bid/offer spreads, representing sentiment not trading.

The USD is selling off on the view that Greece is saved, the Fed is scared, and a “we can’t sit with positions because it never works” mentality. The only really new thing the market needs to digest is that commodities may be nearing a bottom

Happy days seemingly, but there have been some very discordant and troubling comments from the creme de la creme of smart - and big - investors.

Over the last three days, we have reported that some of the most important investment voices in the world are more than a little scared about the ravenous appetite for risk playing out in the market, and the fact that they have been ignored is beyond unnerving. Central banks are driving all investment decisions, and what this implies is that they are in this trade so  deeply that there is no obvious or practical exit.

This commentary by Bloomberg's Richard Breslow showed up on the Zero Hedge Internet site at 9:52 a.m. EDT on Friday---and it's definitely worth reading.  I thank Dan Lazicki for finding it for us.

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Doug Noland: Pro-Bubble

Some estimates have over $1.0 Trillion of corrupt “money” having fled China. How much has made it to U.S. real estate and securities markets? For that matter, how much global finance Bubble “dirty money” has made its way to America? How much legitimate wealth has escaped local fragility for greener U.S. pastures – from China, Russia, Brazil, Venezuela, Latin America, Europe and the Middle East? And how much “hot money” has been unleashed by respective QE currency devaluations from the Bank of Japan and European Central Bank? How big are global leveraged “carry trades”? What have been the impacts and what are the ramifications from these historic flows that I view as unsound, unstable and unsustainable?

By this point, things have gone way beyond the late-nineties “king dollar” dynamic. Recent years have seen unprecedented global flow instability – literally Trillions flowing to and fro in an unremitting chase for returns. The closest parallel is the profoundly unstable global backdrop from the late-twenties. And like the “Roaring Twenties,” few today appreciate how deeply systemic all the unsound finance has become – not with stocks at record highs, bond prices at record highs and household net worth at all-time highs.

Doug's is the voice of financial sanity in a world gone mad.  His weekly Credit Bubble Bulletin was posted on his website Friday evening---and I thank reader U.D. for sending it our way.

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Here’s How to Download and Delete What Google Search Knows About You

Have you ever wondered what Google Search really knows about you? Well, now you can check, as Google has added a new feature that lets you view and download your entire search history.

Yep. Everything.

The feature, which was spotted by the unofficial Google Operating System Blog — though VentureBeat points out that the function was made available in January — gives you access to everything from what you searched for to the links you clicked on from those searches. It also shows you the addresses you’ve searched for.

I was even able to see the list of images I clicked on while searching for pictures of cats eating spaghetti. Now imagine what you’ve looked for. Oh, and clearing your browser history won’t delete this data.

But there’s no reason to panic, because in addition to being able to download your search history, you can clear it.

This interesting article put in an appearance on the Internet site yesterday---and it's the second offering of the day from Norman Willis.

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Wal-Mart mysteriously closed 5 stores, and some people have a wacky conspiracy theory about why

Thousands of Wal-Mart employees are fighting to get their jobs back after Wal-Mart suddenly closed five stores last week without warning.

The retailer said it closed the stores in California, Texas, Oklahoma, and Florida because of persistent plumbing issues that could take as long as six months to fix.

More than 2,200 workers were laid off as a result and given two months of severance pay.

But some critics are skeptical that Wal-Mart closed the stores because of plumbing issues.

This very interesting story is one that I was saving for my Saturday column.  It appeared on the Internet site at 4:14 p.m. on Tuesday---and it's already had over 216,000 hits.  It's the first offering of the day from Roy Stephens.

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Cash Flowed to Clinton Foundation Amid Russian Uranium Deal

The headline on the website Pravda trumpeted President Vladimir V. Putin’s latest coup, its nationalistic fervor recalling an era when its precursor served as the official mouthpiece of the Kremlin: “Russian Nuclear Energy Conquers the World.”

The article, in January 2013, detailed how the Russian atomic energy agency, Rosatom, had taken over a Canadian company with uranium-mining stakes stretching from Central Asia to the American West. The deal made Rosatom one of the world’s largest uranium producers and brought Mr. Putin closer to his goal of controlling much of the global uranium supply chain.

But the untold story behind that story is one that involves not just the Russian president, but also a former American president and a woman who would like to be the next one.

This longish essay was posted on The New York Times on Thursday---and for length and content reasons had to wait for today's column.  I thank Roy Stephens for bringing it to our attention.  There was another story about Hillary and donations that was posted on the Internet site yesterday---and that one is headlined "Many Clinton charity donors also got State Department awards under Hillary".  I thank reader H.W. for sliding it into my in-box at 11:50 p.m. Denver time last night.

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Puerto Rico Warns of Imminent Government Shutdown Due to "Liquidity Crisis"

Puerto Rico's top finance officials said the government of the U.S. territory will likely shutdown in three months because of a looming liquidity crisis and warned of a devastating impact on the island's economy.

In a letter to leading lawmakers, including Governor Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances currently looked unlikely to succeed. It warned of laying off government employees and reducing public services.

"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."

The letter, dated April 21, was also sent to the heads of Puerto Rico's Senate and House as well as the governor. It was signed by the government's fiscal team, including the head of the Government Development Bank and the Treasury Secretary.

This is the Zero Hedge spin on a Reuters story from yesterday.  It appeared on the ZH Internet site at 12:10 p.m. EDT yesterday---and I thank reader 'David in California' for passing it around.

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Hundreds evacuated as Chilean volcano erupts for first time in 40 years and sends huge plume of ash into the sky

Yes, I know I posted something about this in yesterday's column, but this was worth posting.  This spectacular photo essay put in an appearance on the Internet site at 1:29 BST on Thursday morning---and they're definitely worth scrolling through.  I thank reader M.A. for bringing them to my attention---and now to yours.

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HSBC considers leaving the U.K. in wake of tax grabs

HSBC fired a warning shot to the Government on Friday by revealing that the weight of regulation imposed on Britain’s biggest bank since the financial crisis may force it to move its headquarters away from the U.K.

In a surprise announcement ahead of the bank's annual meeting, which came just two weeks before the general election, HSBC’s chairman Douglas Flint said it was launching a review into “where the best place is for HSBC to be headquartered in this new environment”.

Such a move would be likely to take several years, be extremely expensive and force the company to reapply for hundreds of banking licences, but investors celebrated the announcement, with shares in the bank rising by more than 2pc.

Hong Kong, where HSBC was domiciled until it moved to the U.K. in 1993 and which is seen as the most likely destination should it exit London, welcomed the review.

This very interesting article appeared on The Telegraph's website at 8:00 p.m. BST on Friday evening, which was 3:00 p.m. EDT.  It's obviously been edited, because I pulled it off their website just before midnight MDT on Thursday evening.

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Price of Stalling: Upkeep of Mistral Warships Costs France €5 Million a Month

France and Moscow failed to reach an agreement for the delivery of two Mistral ships during a meeting between Francois Hollande and Vladimir Putin in Yerevan, Armenia. Now, the upkeep and maintenance cost for the two ships, sitting at a French port, will cost French taxpayers €5 million per month.

Russian President Vladimir Putin met his French counterpart Francois Hollande at a commemoration event in Yerevan, the Armenian capital, for the 100th anniversary of the Armenian Genocide.

The two presidents spoke about the failed delivery of two Mistral-class helicopter carriers to Russia and attempted to re-negotiate the deal. However, the Friday meeting did not bring any results and the deal still remains frozen.

Earlier this week, Hollande said that France will return the money for the failed Mistral deal, stating that the delivery of the helicopter carriers was still not possible.

This article was posted on the Internet site at 8:01 p.m. Moscow time on their Friday evening, which was 1:01 p.m. EDT in Washington.  I thank Roy Stephens for bringing it to our attention.

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Spying Close to Home: German Intelligence Under Fire for NSA Cooperation

It was obvious from its construction speed just how important the new site in Bavaria was to the Americans. Only four-and-a-half months after it was begun, the new, surveillance-proof building at the Mangfall Kaserne in Bad Aibling was finished. The structure had a metal exterior and no windows, which led to its derogatory nickname among members of the Bundesnachrichtendienst (BND), the German foreign intelligence agency: The "tin can."

The construction project was an expression of an especially close and trusting cooperation between the American National Security Agency (NSA) and the BND. Bad Aibling had formerly been a base for US espionage before it was officially turned over to the BND in 2004. But the "tin can" was built after the handover took place.

The heads of the two intelligence agencies had agreed to continue cooperating there in secret. Together, they established joint working groups, one for the acquisition of data, called Joint Sigint Activity, and one for the analysis of that data, known as the Joint Analysis Center.

But the Germans were apparently not supposed to know everything their partners in the "tin can" were doing. The Americans weren't just interested in terrorism; they also used their technical abilities to spy on companies and agencies in Western Europe. They didn't even shy away from pursuing German targets.

The Germans noticed -- in 2008, if not sooner. But nothing was done about it until 2013, when an analysis triggered by whistleblower Edward Snowden's leaks showed that the US was using the facility to spy on German and Western European targets.

This very interesting article put in an appearance on the German website at 7:20 p.m. Europe time on Friday evening---and it's definitely worth reading if you have the interest.  It's another offering from Roy Stephens.

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On the #Gredge: Greece and E.U. finance ministers fail to reach deal in Riga

Grexit? Gredge? Graccident? Grimbo? Each clever hashtag to describe Greece defaulting and leaving the eurozone is becoming more a reality, after talks between Greece and its EU creditors to unlock €7.2 billion for Athens to pay off its IMF debt failed.

"A comprehensive deal is necessary before any disbursement can take place," Eurogroup President Jeroen Dijsselbloeme said at the press conference in Riga following the meeting Friday. "Responsibility for that relies mainly on Greece," he said, adding that too much time was lost during the past 2 months.

Greece’s four month bailout extension expires in June.

Eurozone finance ministers held Greek debt talks in Riga, Latvia to discuss unlocking bailout funds, so Greece can pay its next $450 million repayment on an IMF loan. The bailout will help Greece’s struggling economy live through several debt repayments due over the course of the next two months. The euro declined on the news of no deal.

This news story showed up on the Russia Today website at 11:15 a.m. Moscow time on their Friday morning---and once again it's courtesy of Roy Stephens.  Another story on the same issue appeared on the Internet site at 7:52 a.m. BST yesterday morning---and it's headlined "Euro zone warns Greece no cash till full reform deal"---and my thanks go out to Roy S. once again.

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U.S. alarmed by Greek energy alliance with Russia

The US is scrambling to head off a Greek pipeline deal with Russia, fearing a disastrous change in the strategic balance of the Eastern Mediterranean as Greece’s radical-Left government drifts into the Kremlin’s orbit.

Ernest Moniz, the US Energy Secretary, said his country is pushing for an alternative gas pipeline from Azerbaijan that would help break the stranglehold that Russian state-controlled firm Gazprom has on European markets.

“Diversified supplies are important and we strongly support the ‘Southern Corridor’ to bring Caspian gas to Europe,” he told a group of reporters on the margins of CERAWeek oil and gas forum in Houston.

He insisted that it was vital to uphold “collective energy security” in Europe.

Greece’s foreign minister, Nikos Kotzias, said Gazprom made a “very good offer”, with guaranteed gas supplies for 10 years at good prices. He asked how his Syriza government could justify turning down such an opportunity unless the Western powers could come up with something better.

This commentary by Ambrose Evans-Pritchard appeared up on the Internet site at 7:57 p.m. BST on Thursday evening---and it's another story courtesy of Roy Stephens.

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One Hundred Years of Silence: Turks Slowly Take Stock of Armenian Genocide

A church like that can help a person, says Armen. It can help them from giving up hope -- and that is indeed something.

The fact that the church is even standing here -- beautiful and steadfast in a place that was only recently the site of ruins -- instills a sense of courage, says Armen. And courage is something that is badly needed in these parts, especially in Diyarbakir.

The city is located in southeastern Turkey, deep in the Anatolian mountain region. Diyarbakir is gray, loud and lackluster. But it does have one special landmark -- the stylishly restored St. Giragos Church, located in the Old Town, a labyrinth of crumbling homes and alleys that reverberate with children's shouts as they kick around a soccer ball.

It's a Christian-Armenian church, the first of its kind to be rebuilt and highly symbolic in a city like Diyarbakir. The builders say that attempts were made to prevent the reconstruction, hinting that they may have been linked to some of the politicians involved in the project. Indeed, some felt provoked by the restoration of the church.

For others, the church is a symbol of a major political shift that has gripped Turkish society, a symbol of a willingness to confront its history. The church also helps people to remember and reaffirm their true identity. People like Armen.

This very interesting article was posted on the website back on Tuesday---and is another one of those stories that had to wait for my Saturday column.  I haven't read it yet, either, but it's certainly on my must read list today or tomorrow.  Once again I thank Roy Stephens for finding it for us.

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All aboard the Lisbon to Vladivostok train, no stops in Kiev or Warsaw

In recent days the German Chancellor Angela Merkel again allowed herself to talk about a common geopolitical and economic European space, including Russia. In my opinion this statement could be regarded as a feat, considering all the pressure that Washington has been exerting on Germany.

"In the future we see a major economic trading zone, which includes Russia.” - said Frau Merkel on April 17th at an economic forum in Stralsund. And taking a deep breath, boldly added, "We progress step by step, and move closer to a common economic space, and just like Vladimir Putin once said, it will be 'from Vladivostok to Lisbon.' "

Angela Merkel of course mentioned Putin, hated in the USA, for a reason. Yet despite of that, the Chancellor made it clear that Germany will try to defend its sovereignty. After all, only Americans share the view that the Russian President is the devil incarnate.  The steps towards an economic Euro-Asian trade zone seem logical and consistent for the Europeans.

Having said that, Washington's goal for the Europeans is not a big family secret.

At an accelerated pace, the plans are to complete the construction of a "Hate Belt," that includes various Russophobic States from the Baltic all the way to the Black sea, states that would hinder the development and strengthening of economic relations between Russia and the European Union. In fact, there are only two ways left through which you can deliver and trade goods: across land through Belarus and then through Poland, or by sea through St. Petersburg. At this moment and time, no sane businessman would attempt to deliver and trade goods via Ukraine.

This very interesting commentary was posted on the Internet site on Tuesday---and it's definitely worth reading if you're a serious student of the New Great Game.

It's courtesy of Roy Stephens, of course.

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What does Putin want? A major analysis by Rostislav Ishchenko

The analysis below is, by far, the best I have seen since the beginning of the conflict in the Ukraine.  I have regularly posted analyses by Ishchenko on this blog before, because I considered him as one of the best analysts in Russia.  This time, however, Ishchenko has truly produced a masterpiece: a comprehensive analysis of the geostrategic position of Russia and a clear and, I believe, absolutely accurate analysis of the entire “Putin strategy” for the Ukraine.  I have always said that this conflict is not about the Ukraine but about the future of the planet and that there is no “Novorussian” or even “Ukrainian” solution, but that the only possible outcome is a strategic victory of either Russia or the USA which will affect the entire planet.  Ishchenko does a superb overview of the risks and options for both sides and offers the first comprehensive “key” to the apparently incomprehensible behavior of Russia in this conflict.  Finally, Ishchenko also fully understands the complex and subtle dynamics inside Russian society.  When he writes “Russian power is authoritative, rather than authoritarian” he is spot on, and explains more in seven words than what you would get by reading the billions of useless words written by so-called “experts” trying to describe the Russian reality.

We all owe a huge debt of gratitude to Denis, Gideon and Robin for translating this seminal text, which was very difficult to translate.  The only reason why we can read it in such a good English is because the innumerable hours spent by these volunteers to produce the high quality translation this analysis deserves.

I strongly recommend that you all read this text very carefully.  Twice.  It is well worth it.

The Saker

That was the introduction to this essay that was posted on Internet site on Wednesday---and without doubt, it's the most important must read in today's column.  Please do yourself a favour and give it the time it deserves.

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Pepe Escobar: Pakistan enters the New Silk Road

Now how do you top this as a geopolitical entrance? Eight JF-17 Thunder fighter jets escorting Chinese President Xi Jinping on board an Air China Boeing as he enters Pakistani air space. And these JF-17s are built as a China-Pakistan joint project.

Silk Road? Better yet; silk skyway.

Just to drive the point home – and into everyone’s homes – a little further, Xi penned a column widely distributed to Pakistani media before his first overseas trip in 2015.

He stressed, “We need to form a ‘1+4′ cooperation structure with the Economic Corridor at the center and the Gwadar Port, energy, infrastructure and industrial cooperation being the four key areas to drive development across Pakistan and deliver tangible benefits to its people.”

Quick translation: China is bringing Pakistan into the massive New Silk Road(s) project with a bang.

This must read article by Pepe was posted on the Asia Times website on Friday sometime---and it's the final offering in today's column from Roy Stephens.  I thank him on your behalf.

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Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on this weeks release of current U.S. economic data, the Greek debt crisis and the Eurogroup meeting this weekend in Riga, the farce of high frequency trading and the lack of responsible regulation, and Swiss gold exports and global demand.

This 8:01 minute audio interview with host Geoff Rutherford was posted on the Internet site on Friday afternoon---and it' worth your while.

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UBS' commodities team, bullish on gold, sees equities and gold driving up

This year credit conditions in the U.S. look to be worsening, possibly dramatically. Of that the National Association of Credit Management (NACM), which surveys credit companies in the US about debt, has become increasingly convinced. In February NACM warned of deteriorating conditions, though there was some question if the decline in its index was temporary.

But after March data, it decided it wasn’t a one off.”There is quite obviously some serious financial stress manifesting in the data and this does not bode well for the growth of the economy going forward,” NACM wrote in late march. “These readings are as low as they have been since the recession started and to see everything start to get back on track would take a substantial reversal at this stage. The data from the CMI is not the only place where this distress is showing up, but thus far, it may be the most profound.”

In a recent note UBS’ commodities team took this, among other factors, as a “flashing red” signal that credit conditions in the US have gone sour and that the US Federal Reserve will be forced back to loosening its belt again. As UBS has argued for some time, it sees this as making for a bull run in gold, and gold equities in particular.

As mild warning: UBS’ commodities team acknowledges that in its thinking on debt/gold it is at odds with consensus view on debt conditions in the US and the broader in house view at UBS. That is, that they are not dire. But the UBS’ commodities team argues the US economy is not as healthy as it may seem. It says, “broad US economy returns (over the cost of capital) are in structural and cyclical decline, credit appetite is deteriorating, and that will lead to a trend widening of spreads, deteriorating credit availability and uptake, slowing growth and a new round of Fed reflation.” Under these conditions it notes that gold and gold equities do well.

This commentary was posted on the Internet site on Thursday morning---and it's something I found on the Sharps Pixley website.  The actual headline reads "Signs ‘flashing red’ on debt, Fed’s return".

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Gold Is Near an All-Time Inflation-Adjusted Low -- Jeff Clark, Casey Research

Adjusted for the 1980 inflation measure, the gold price is approaching its bear market low of 2001. In fact, gold is now below the 1975 price when it became legal to own it again!

These data clearly show that when measured against a more realistic view of inflation, gold is dramatically undervalued.

And with total worldwide debt levels up by a whopping $57 trillion since the end of 2007, the need to own it is as important as ever.

Don’t worry about the current range bound price. Buying now represents tremendous value and tremendous protection against the next economic crisis.

Of course we all know why the gold price is that low, but there's not a word about it here.  This short commentary appeared on the Casey Research website yesterday---and it's worth your while.  Buy with both hands, dear reader!

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Gold Newsletter's Brien Lundin: Gold market gets 'curiouser and curiouser'

"Curiouser and curiouser," cried Alice, in a statement that could be readily applied to today's gold trading session.

Granted, she was referring to talking rabbits and litigious queens, but that the dollar took a sizeable turn to the downside today, and gold followed it even further into the red, has to rank as a similarly fantastic occurrence.

The the dollar is down about 0.4 percent at last check, but June gold is down considerably more -- as much as 2 percent off from the day's highs for the yellow metal.

That's not an easy thing to do. Not only are the fiat dollar and gold at opposite ends of the philosophical spectrum, they are also at opposite ends of the mathematical see-saw: Since gold is priced in U.S. dollars, every tick down in the dollar against its trade partners puts an equal amount of pricing pressure on gold in the upward direction.

So there have to be some very powerful forces at work to push gold lower along with the dollar ... just as it takes a special situation to drive gold and the dollar upward in unison.

This must read commentary by Brien from his latest newsletter was posted in the clear in this GATA release yesterday.

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Venezuela pawns nearly $1 billion in gold reserves

The Central Bank of Venezuela has pawned nearly $1 billion of its gold reserves, sources close to the central bank say. The swap operation, as it is called in the financial markets, was signed with the US bank Citibank, which was chosen from a group of five international organizations, which also aspired to structure this financial instrument.

Although details of the operation are unknown, experts have estimated that the U.S. bank will charge a fee of between 6 and 7 percent for preparing the swap. The gold remains in the vaults of the Bank of England. But it would be taken as collateral in case the Central Bank of Venezuela does not pay on time the amount borrowed from Citibank.

It was thought that the swap's value would be $1.5 billion, but in the end a lower figure was achieved. The funds will be used to pay for imports, an unofficial source said.

What's this gold doing at the Bank of England?  I thought they brought all their gold home years ago?  Obviously they had to move it if they wanted to do the swap.  This story, in Spanish, appeared on the Internet site yesterday---and it's posted in the clear---and in English---at the Internet site.

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Up to $1 trillion in gold is held by temples in India. Now Modi wants them to monetize this vast hidden wealth

Workers for the centuries-old Shree Siddhivinayak Temple here spent hours unpacking gold coins, heavy wedding necklaces and lustrous pendants from a closely guarded “strong room.” By the time gold-buyers began mingling with worshippers at the sweltering sanctuary on Tuesday, the jewelry auctioneers were ready.

“This is not a regular gold coin that you would buy from a gold shop — it contains the Lord’s blessing,” a temple board member said, holding up a tiny coin, probably left by a devotee years ago. It eventually sold for four times its face value.

Wealthy Hindu temples such as this one are repositories for much of the $1 trillion US worth of privately held gold in India — about 22,000 tons, according to an estimate from the World Gold Council. In 2011, one temple in south India was found to have more than $22 billion in gold hidden away in locked rooms rumoured to be filled with snakes. Another has enough gold to rival the riches stashed at the Vatican, experts said.

But little of it is contributing to the Indian economy, and now Prime Minister Narendra Modi’s government is looking to monetize India’s vast hidden wealth. In coming weeks, the government plans to begin a program that will allow temples to deposit their gold into banks to earn interest and circulate in the economy, rather than sit idle in musty vaults. The gold, officials said, would be melted down and sold to jewellers.

This very interesting story, which is partly what you already know, but there have been some developments since I last posted a story on this issue---and it's worth reading if you have the interest.  It originally appeared on The Washington Post website, but was picked up by the Internet site yesterday---and I found it on the Sharps Pixley website.

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Epoch Times: China uses gold to pursue global power

China's strategy in acquiring substantial amounts of gold, possibly as support for the inclusion of the country's currency in the Special Drawing Rights issued by the International Monetary Fund, is the topic of a report by Valentin Schmid in today's edition of The Epoch Times.

GATA secretary/treasurer Chris Powell is quoted about the longstanding recognition by the United States that whichever nation has the most gold can control its price and thereby control the value of all other currencies.

The Epoch Times' report is headlined "China Uses Gold to Pursue Global Power" and it was posted on the newspaper's Internet site yesterday.  It's definitely worth reading---and the photo alone is worth the trip.

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How central banks mislead on gold reserve reporting -- Lawrence Williams

Since writing yesterday’s article on scepticism regarding central bank gold reporting (see: Does any nation hold the gold it says it does?), I have had my attention drawn to the publication by The Gold Anti Trust Action Committee (GATA) around 2 ½ years ago of a leaked IMF confidential document on central bank reporting of gold reserves.

I append the GATA article, with a link to the full IMF document, on this below and from it it can be seen how non-transparent such reporting has become – in the interests of protection of bank-sensitive data – when it comes to central banks hiding leasing and swap agreements for their gold in their overall reserve figures. This can, as my earlier article pointed out, mean that what is actually reported as being a nation’s physical gold reserve at a specific point in time may, in fact, be an extremely misleading figure given the amount of gold swap and leasing activity which may have been being undertaken.

Admittedly the IMF document referred to is now 16 years old, but there is no reason to believe reporting by the individual banks of their gold reserve figures to the IMF are any more transparent now than then – indeed they may even be less so.

This must read commentary by Lawrie, filed from London, appeared on the Internet site at 10:17 a.m. BST on Friday morning.

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Apr 24, 2015

Bankruptcies Suddenly Soar Across Corporate America, Worst Since Q1 - 2009

"Come down to Houston," William Snyder, leader of the Deloitte Corporate Restructuring Group, told Reuters. "You'll see there is just a stream of consultants and bankruptcy attorneys running around this town."

But it's not just in Houston or in the oil patch. It's in retail, healthcare, mining, finance. Bankruptcies are suddenly booming, after years of drought.

In the first quarter, 26 publicly traded corporations filed for bankruptcy, up from 11 at the same time last year, according to data from Six of these companies listed assets of over $1 billion, the most since Financial-Crisis year 2009. In total, they listed $34 billion in assets, the second highest for a first quarter since before the financial crisis, behind only the record $102 billion in 2009.

The largest bankruptcy was the casino operating company of Caesars Entertainment. Next in line were Doral Financial, security services firm Altegrity, RadioShack, and Allied Nevada Gold. The first oil-and-gas company showed up in sixth place: Quicksilver Resources. It joined privately owned natural-gas drillers in crushing their investors.

This very interesting article was posted on Internet site a week ago today---and I thank Casey Research's BIG GOLD editor Jeff Clark for sending it our way yesterday.

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How 'Spoofing' Might Have Crashed the Market

Earlier this week a trader was arrested in London and accused of "spoofing." What's spoofing and what does it have to do 2010 flash crash? Bloomberg View's Matt Levine explains. (Levine is a Bloomberg View columnist. The opinions expressed are his own.)

Well, dear reader, if you want to know exactly how JPMorgan et al---along with their HFT buddies---rig silver and gold prices lower, all you have to do is watch this 1:19 minute video commentary posted on the Bloomberg website at 5:39 a.m. Denver time yesterday morning---and you'll have your answer.  I thank Dan Lazicki for sending it along---and it's an absolute must watch.  Ted Butler has something to say about this in the quote in The Wrap.

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Initial Claims Worse Than Expected (Again), Remain Flat For 2015

For the second week in a row, initial claims were worse than expected and increased year-to-date, While still below the magic 300k levels, claims printed 295k against expectations of 288k confirming the stagnation of the job market since the end of QE3 and the government's fiscal year. California and New York saw the biggest rise in initial claims with only Illinois seeing a drop; notably Texas saw layoffs across various sectors, as it seems it is not as 'diverse' as Richard Fisher propagandized. After 4 straight weeks of decline, continuing claims rose this week by the most in almost 3 months (but remains close to 15 year lows).

This tiny Zero Hedge story, along with a most excellent chart, appeared on their Internet site at 8:38 a.m. Thursday morning EDT---and it's the second story in a row from Dan Lazicki.

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New Home Sales Tumble by Most in Almost 2 Years as Northeast Crashes

After existing home sales sent stocks vertical on great news, so new home sales plunge has sent stocks vertical on bad news. An 11.1% drop MoM - the biggest since July 2013 - dragged new home sales back below 500k to 481k SAAR - the biggest miss in a year. Sales of new homes collapse 33.3% in The Northeast and The South saw new home sales crash 15.8%.

This is another brief Zero Hedge piece---and this one is courtesy of reader M.A.  It appeared on their website at 10:07 a.m. EDT yesterday---and the three embedded charts are definitely worth your while.

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U.S. Manufacturing PMI Misses by Most on Record as New Orders Tumble

On the heels of weak PMIs from Europe and Asia, Markit's US Manufacturing PMI plunged to 54.2 in April (from 55.7). Against expectations of a rise to 55.6, this is the biggest miss on record. Of course, this is 'post-weather' so talking heads will need to find another excuse as New Orders declined for the first time since Nov 2014.

This Zero Hedge commentary from Thursday morning EDT is built around a Bloomberg story.  It---and the ZH piece---are both worth your time---and it's the second offering in a row from reader M.A.

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Stockman: Global 'Mania' in Government Bonds is Veering Toward Disaster

The world's central banks have managed to brew up a "planet-wide mania" in government bonds that are trading at dangerous negative yields and could lead to a meltdown, according to David Stockman, White House budget chief in the Reagan administration.

Stockman said the level of complacency in world financial markets is "downright astounding — even stupid."

He cited data from BlackRock Investment Institute and Thomson Reuters that there are now $5.3 trillion in government bonds trading at negative yields, mostly in Europe, with already-low U.S. Treasury yield levels being pushed lower by the strength of the dollar.

"The central banks are just mechanically and blindly pushing on a string of monetary expansion that is levitating not the main street economy but only financial asset prices in the canyons of Wall Street," Stockman wrote on his Contra Corner blog.

This article showed up on the Internet site at 6:40 a.m. EDT on Thursday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

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Marc Faber: 'Global Economy is Weakening'

The global economic picture isn't bright, and central banks are largely to blame, says Marc Faber, publisher of the Gloom, Boom & Doom Report.

"The global economy is not strengthening. It is weakening," he told CNBC. "China is weakening. The U.S. economic statistics recently have been on the weak side."

China's economy grew 7 percent in the first quarter, its worst showing in 6 years, and the Atlanta Federal Reserve's forecasting model shows growth of only 0.1 percent for U.S. GDP last quarter.

The Fed made a mistake in cutting short-term interest rates to almost zero, Faber argued. "The monetary policies as conducted by the Fed have created a lot of unaffordability in the system."

This is another story from the Internet site.  This one was posted there on Monday morning---and it's another story from Elliot Simon.

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Oil slump may deepen as U.S. shale fights OPEC to a standstill

The U.S. shale industry has failed to crack as expected. North Sea oil drillers and high-cost producers off the coast of Africa are in dire straits, but America's "flexi-frackers" remain largely unruffled.

One starts to glimpse the extraordinary possibility that the U.S. oil industry could be the last one standing in a long and bitter price war for global market share, or may at least emerge as an energy superpower with greater political staying-power than OPEC.

It is 10 months since the global crude market buckled, turning into a full-blown rout in November when Saudi Arabia abandoned its role as the oil world's "Federal Reserve" and opted instead to drive out competitors.

If the purpose was to choke the U.S. "tight oil" industry before it becomes an existential threat - and to choke solar power in the process - it risks going badly awry, though perhaps they had no choice. "There was a strong expectation that the U.S. system would crash. It hasn't," said Atul Arya, from IHS.

This longish, but very interesting commentary by Ambrose Evans-Pritchard put in an appearance on the Internet site at 8:59 p.m. BST in London on Wednesday evening---and it's the first contribution of the day from Roy Stephens.  It's worth reading if you have the interest.

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These Two Assets---Coal and Oil---Shows Us That a Crash is Coming

If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality.

Put simply, a false “floor” was put under asset prices via fraud and funny money.  Consider the case of coal.

In the U.S., coal has become a political hot button. Consequently it is very easy to forget just how important the commodity is to global energy demand. Coal accounts for 40% of global electrical generation. It might be the single most economically sensitive commodity on the planet.

With that in mind, consider that coal ENDED a multi-decade bull market back in 2012. In fact, not only did the bull market end… but coal has erased virtually ALL of the bull market’s gains (the green line represents the pre-bull market low).

This short, but must read article [courtesy of Phoenix Capital Research] showed up on the Zero Hedge website at 10:12 a.m. EDT on Thursday morning---and the charts alone are worth the trip.  It's the third offering of the day from reader M.A.

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Deutsche Bank to pay record $2.5 billion to resolve LIBOR rigging

Deutsche Bank AG today was ordered to pay a record $2.5 billion fine and fire seven employees to settle U.S. and U.K. investigations into its role in manipulating Libor.

Deutsche Bank must terminate six London employees and one in Frankfurt who engaged in wrongful conduct, the New York Department of Financial Services said in a statement. The DFS didn't identify them by name and said one is a managing director, four are directors, and two are vice presidents.

"Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain," DFS Superintendent Benjamin Lawsky said in the statement. "We must remember that markets do not just manipulate themselves: It takes deliberate wrongdoing by individuals."

Of course that last statement is equally true about the precious metal market as well.  This news item appeared on the Bloomberg website at 6:00 a.m. Denver time yesterday morning---and I found it in a GATA release.

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Greece's Piraeus Bank offers relief to poverty-stricken

Piraeus Bank will write off credit cards and retail loans up to €20,000---(US$21,484) for Greeks who qualify for help under a law the leftist government passed to provide relief to poverty-stricken borrowers, it said on Thursday.

Greece has received two E.U./IMF bailouts totalling €240 billion since it was hit by a debt crisis. The austerity programme imposed as a condition of the rescue has left one in four people out of work, and thousands struggling to pay debts.

The Syriza party was elected in January on a promise to end the belt-tightening. Its first legislative act was to pass a bill offering free food and electricity to thousands of struggling Greeks.

Piraeus said it would also write off interest on mortgages for qualifying borrowers, but did not provide details on how many people might benefit.

The above four paragraphs is all there is to this tiny Reuters article from Thursday morning EDT.  It was posted there at 9:56 a.m.---and I thank reader 'David in California' for finding it for us.

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Bulgaria to build new $236mn ‘gas corridor’ with Romania and Greece

Bulgaria has reportedly inked a deal on a new “gas corridor” with Romania and Greece which will be completed in 2018, and is expected to cut the country’s almost total dependency on Russian natural gas.

The agreement on the $236.2 million link between Bulgaria, Romania and Greece, which is also known as a vertical gas corridor, has been signed by the energy ministers of the three countries in Sofia, the Wall Street Journal reported on Wednesday. Bulgaria will also be able to buy about 3-5 billion cubic meters of gas annually from Azerbaijan and from Greece’s liquefied natural gas terminals.

“We are finally getting a new source of gas because until now we were totally reliant on one source—Russia,” Bulgaria’s Deputy Energy Minister Zhecho Stankov was cited as saying by WSJ.

Bulgaria consumes about 3 billion cubic meters of natural gas, 95 percent of which is imported from Russia, and the majority of that comes through Ukraine which is seen as an unreliable transit country. It has been cut off from Russian supplies twice, in 2006 and 2009. Bulgaria has been seeking to diversify its gas supply by building interconnection links with neighbors.

This Russia Today story put in an appearance on their Internet site at 12:12 p.m. Moscow time on their Thursday afternoon, which was 5:12 a.m. EDT in Washington.

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U.S. military instructors in eastern Ukraine combat zone – Russian military

The Russian Defense Ministry said the U.S. military instructors have been spotted in the combat zone in eastern Ukraine, training the country’s National Guard in the field, despite promises to hold the exercises at a remote range in Lvov.

Defense Ministry spokesman Major General Igor Konashenkov slammed Washington’s claims of increased presence of Russian air defense units in the Donetsk and Lugansk Regions of Ukraine as “astonishing in its incompetence,” TASS reported.

On Wednesday, U.S. State Department spokeswoman Marie Harf said that it’s currently “the highest amount of Russian air defense equipment in eastern Ukraine since August,” without providing any evidence to substantiate the claim.

Konashenkov explained that Harf’s statement was just an attempt to “warm up” the general public ahead of the NATO summit, scheduled to take place in Antalya, Turkey on May 13-14.

This Russia Today article was posted on their website at 5:52 p.m. Moscow time on Wednesday afternoon---and it's another offering from Roy Stephens.

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Pepe Escobar -- Brzezinski Bye, Bye: Eurasia as the U.S. Knew it is Over Forever

Move over, Cold War 2.0. The real story, now and for the foreseeable future, in its myriad declinations, and of course, ruling out too many bumps in the road, is a new, integrated Eurasia forging ahead.

China’s immensely ambitious New Silk Road project will keep intersecting with the Russia-led Eurasia Economic Union (EEC). And that will be the day when the EU wakes up and finds a booming trade/commerce axis stretching from St. Petersburg to Shanghai. It’s always pertinent to remember that Vladimir Putin sold a similar, and even more encompassing, vision in Germany a few years ago – stretching from Lisbon to Vladivostok.

It will take time – and troubled times - but Eurasia’s radical face lift is inexorable. This implies an exceptionalist dream – the U.S. as Eurasia hegemon, something that still looked feasible at the turn of the millennium – fast dissolving right before anyone’s eyes.

This commentary by Pepe certainly falls into the absolute must read category, especially for all serious students of the New Great Game.  It appeared on the Asia Times website on Thursday sometime---and this particular iteration is posted on the Internet site.  The first person through the door with it was South African reader B.V.---and I thank him for this.

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Surreal! Sunset turns massive Chilean Calbuco volcanic eruption into amazing scene

The record-breaking volcanic eruption in southern Chile is dramatically altering skies, as spectacular views emerge of white plumes creeping miles up into the sky after coloring the night orange. A second blast took place hours ago.

Nature’s colossal power was aptly demonstrated by Calcubo, which erupted a second time just a few hours ago, with agencies reporting a stronger eruption than the first.

This extremely interesting news item, courtesy of Russia Today, was posted on their website at 9:02 a.m. Moscow time on their Thursday morning, but was updated at 2:05 a.m. Moscow time on their Friday morning with new photos and videos from the second eruption.  Several readers were kind enough to send me stories on this, but this is the best one---and I thank Roy Stephens for digging it up for us.  The last video clip is amazing.

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Stricter anti-money laundering regulations derail gold trading in Belgium

"The Metals Focus team has just returned from a trip to Belgium. Our meetings and discussions with local players have confirmed that the local gold market has continued to suffer from stricter anti-money laundering measures that have been introduced in recent years.

"It is important to highlight the importance of the Belgian bullion market in Europe. Due to competitive prices being offered by local players, Belgium has for long been an active place of physical gold trading in Europe. This has been particularly the case during 2008-12 when the Belgian gold market witnessed a significant rise in volumes on both sides of the market. On the one hand, a surge in demand for physical gold across Europe in the aftermath of the financial crisis and the sovereign debt problem led to a rise in hand-carried purchases of gold bar and coins by the non-Belgian trade. On the other hand, a sharp rise in jewellery recycling in debt-ridden southern European countries saw an increasing amount of gold being shipped to Belgium for remelting.

"However, the size of the local market has shrunk considerably over the last couple of years, as the regulations on cash transaction payment became tighter .... Since April 2012, traders in Belgium have no longer been allowed to pay or be paid in cash for the trading of precious metals for an amount of €5,000 or more (€3,000 or more from the start of 2014), both in the case of a sale or a purchase of such metals. Prior to that, the upper limit for cash transactions was €15,000.

What the story doesn't say, dear reader, is that these are probably daily cash limits---and it wouldn't deter any serious buyer.  We have a $10,000 per day cash limit in Canada---and it's hardly ever an issue.  The cash rules we have at our store are far stricter than that.  It's $9,500 per person, per week.  I thank Casey Research's own Doug Hornig for passing this story around---and it was posted on the Internet site on Wednesday.

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Sprott said planning unsolicited bid for Canadian metals trusts

Sprott Asset Management LP is planning to make an unsolicited offer to acquire Central GoldTrust and Silver Bullion Trust valued at $800 million, a person with knowledge of the matter said.

An offer at that level would reflect a 3.5 percent discount to the combined market value of the trusts at the close Wednesday of about $829 million. The proposal could come as early as today, said the person, who asked not to be identified because the information is private.

The trusts, which buy and hold substantially all of their assets in respective metals in bullion and certificates, have been under pressure from investor Polar Securities Inc., the Toronto-based hedge fund. Polar has been urging the trusts to change how unit holders can redeem their investment as a means of closing their trading gaps.

I've posted a few things about this already that Stephan Spicer sent our way.  Now here are the current developments in the main stream media.  This Bloomberg news item showed up on their website at 7:25 p.m. MDT on Wednesday evening---and it's a story I found on the Internet site.  It's worth skimming if it concerns you.

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2014 FULL YEAR RESULTS: Top Primary Silver Miners Lost $1.9 Billion

With the last remaining company finally releasing their year-end results, my top primary silver miners lost a combined $1.9 billion in net income in 2014.  While two-thirds of the group reported significant write-downs (impairments),  two of the largest companies suffered the highest losses.

Even though the group experienced record net losses, seven of the twelve actually enjoyed positive adjusted income.  Let me explain.  Companies report net income and adjusted income.  Net income includes various items such as impairments, losses (or gains) on derivatives, hedges, investments or financial exchange losses (gains), and etc.

While these financial items are apart of their profit and loss statement, I like to focus on their adjusted income which removes these items in order to get a better idea of how successful they are at MINING SILVER.  As I mentioned before, two of the largest silver producers in the group suffered huge net income losses due to large impairments, but their adjusted income wasn’t as bad.

I'm certainly not prepared to vouch for the financial numbers that are reported in this silver-related story, but they should come as no surprise to anyone.  And even though every single primary silver miner knows that JPMorgan and Scotiabank are short the COMEX futures market in silver up the wazoo, they won't do a thing about it.  Why their senior shareholders stand for it is beyond me.  But it is what it is.  This article appeared on the Internet site on Monday---and I thank reader U.D. for sending it our way yesterday.  It's worth reading.

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Swiss gold exports show Asia buying more as investors sell bars

China and India helped buy up investors' biggest gold sales in more than a year.

Gold exports to China from the refining hub of Switzerland almost doubled to 46.4 metric tons in March, the most among monthly data starting in January 2014, according to the Swiss Federal Customs Administration. Shipments to India more than doubled to 72.5 tons as imports from the U.K. climbed sixfold.

That's an indication that gold bars are leaving U.K. vaults for Switzerland, where they're refined and sent to Asia. India and China, the biggest buyers, boosted purchases in 2013 when investors dumped the metal amid the biggest price rout in three decades. Global sales from gold-backed funds totaled 55.7 tons in March, the most since 2013, data compiled by Bloomberg show.

"The big investor outflows from the U.K. via Switzerland to China and India are a continuation of the flow of metal from West to East," Matthew Turner, an analyst at Macquarie Group Ltd., said by phone from London. "Short-term, it is a sign of weakness, not of strength in the market."

I posted two of Nick's charts on Swiss gold imports and exports just before the Critical Reads section, so you wish to refresh your memory, you can check them out again.  This short Bloomberg story was posted on their Internet site at 3:55 a.m. Denver time on Thursday morning---and I found it embedded in another GATA release.  It's worth reading.

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South African gold miners union plans to demand wage hikes of 75%

South Africa's National Union of Mineworkers is planning to submit demands to the gold sector next week calling for a 75-percent hike in the basic pay for entry-level workers, according to union sources familiar with the matter.

"For the basic wage at the entry level, we are planning to demand a raise to 10,000 rand ($823) a month in the first year from 5,700 rand at present," said a union source, who asked not to be named. This was confirmed by a second source in the union.

That would set the stage for tough negotiations and a potentially protracted dispute with companies in South Africa's gold sector, where profit margins are under pressure.

This gold-related news item put in an appearance on the Reuters website at 1:47 p.m. EDT yesterday afternoon---and it's another story that I found on the Internet site.

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Alasdair Macleod: Gold, the SDR, and BRICS

If gold doesn't break into the Special Drawing Rights of the International Monetary Fund along with China's currency, the monetary metal might be incorporated into a similar international currency created by the New Development Bank, an institution being established by developing countries, GoldMoney research director Alasdair Macleod writes.

Macleod's analysis is headlined "Gold, the SDR, and BRICs"---and it appeared on the Internet site yesterday.  It's worth reading as well.  Once again it's a gold-related story I found in a GATA release yesterday.

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Lawrence Williams: Does any nation hold the gold it says it does?

Official central bank gold reserve figures as reported to the International Monetary Fund are at best unreliable---and at worst active deceptions concealing market interventions, Mineweb's Lawrence Williams acknowledged yesterday.

"China has 1,054.1 tonnes of gold in its official reserves. Yeah right! The USA has 8,133.5 tonnes in its reserves – the world’s largest. But forgive me if I treat this figure, and those reported by some other central banks, with about as much scepticism as I treat the official Chinese figure. Much is made of the fact that China has not updated its official reserve figure since 2009 – but then the US has not updated its figure for nearly 40 years. Something similar applies to many other central banks which report identical gold volumes year in, year out."

"It’s all a question of accounting and presentation of statistics. In truth the major central bank holders of gold only tell the IMF what they want the world to believe are their actual attributable gold holdings and the true amounts of accessible physical gold currently held on their own behalf are quite probably somewhat different in a number of cases."

This must read commentary by Lawrie showed up on the Internet site late Thursday morning London time---and it's another story I found in a GATA release, as I was sound asleep when it was first posted.

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Apr 23, 2015

McDonalds Reports Disturbing Numbers, Misses Across The Board; Stock Jumps

Moments ago McDonalds reported its latest sales numbers which were basically atrocious, worse than usual, and missed across the board. From BBG:


At this point the operational challenges facing the company are clearly unfixable in its current iteration which is broken beyond merely a CEO switch, and not even a "buy 1 Big Mac, get 3 Big Macs (and Joseph A Banc suits) free" strategy will fix the ailing fast food maker, whose secular collapse is best captured by the charts below.

This Zero Hedge article appeared on their Internet site at 8:42 a.m. EDT on Wednesday morning---and I thank reader M.A. for today's first story.

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Flash crash arrest lays bare regulatory lapses at all levels -- starting with CME Group

CME Group Inc. concluded within four days of the 2010 flash crash that algorithmic trading on futures exchanges didn't exacerbate losses in the market.

When Washington regulators did a five-month autopsy in 2010 of the plunge that briefly erased almost $1 trillion from U.S. stock prices, they didn't even consider whether it was caused by individuals manipulating the market with fake orders.

Their analysis was upended Tuesday with the arrest of Navinder Singh Sarao -- a U.K.-based trader accused by U.S. authorities of abusive algorithmic trading dating back to 2009. Even that action was spurred not by regulators' own analysis but by that of a whistle-blower who studied the crash, according to Shayne Stevenson, a Seattle lawyer representing the person who reported the conduct.

Regulators were aware of Sarao's trading behavior as early as 2009, when officials at CME -- which runs the exchange where Sarao allegedly placed his problematic trades -- spotted him placing and then canceling large numbers of orders, and warned him against placing deceitful trades, according to an FBI affidavit. Sarao continued to manipulate markets through March 2014, the FBI said.

"How this continued for six years when the CME appeared to know about, it kind of boggles my mind," Dave Lauer, president of Kor Group, a lobbying and research firm, said by phone. "This is about as simple and easy as you can get, and it took them this long to do anything about it."

This is the same CME Group that's aiding and abetting JPMorgan et al in their precious metal price management scheme, particularly in silver.  This must read Bloomberg story showed up on their website at 1:24 p.m. EDT yesterday afternoon---and I found it in a GATA release.

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JPMorgan Chase Bans Storage of Cash in its Safety Deposit Boxes

Some JPMorgan Chase customers are receiving letters informing them that the bank will no longer allow cash to be stored in safety deposit boxes.

The content of a post over on the Collectors Universe message board suggests that we may be about to see a resurgence of the old fashioned method of stuffing bank notes under the mattress.

My mother has a SDB at a Chase branch with one of my siblings as co-signers. Last week they got a letter outlining a number of changes to the lease agreement, including this:

“Contents of the box: You agree not to store any cash or coins other than those found to have a collectible value.”

Another change is that signatures will no longer be accepted to access the box. The next time they go in they have to bring two forms of ID and they will be issued a four-digit pin number that will be used to access the box then and in the future.

The letter, entitled “Updated Safe Deposit Box Lease Agreement,” was sent out to customers at the beginning of the month.

Well, dear reader, the reason that I'm posting this story is because TD/Canada Trust here in Edmonton just advised me of the same thing, so take this as sign of things to come.  This news item appeared on the Internet site on Wednesday sometime---and I thank Brad Robertson for sharing it with us.

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Patriot Act extension bill introduced by Senator McConnell

Senate Majority Leader Mitch McConnell,  introduced a bill Tuesday to extend the controversial Patriot Act and its surveillance provisions until 2020.

The extension would allow the National Security Agency to continue to collect data of millions on U.S. phone records daily. The NSA does so under the authority of Section 215, which allows for secret court orders to collect "tangible things" that could be used by the government in investigations.

The Patriot Act was enacted after the September 11 attacks to combat terrorism. McConnell used a Senate rule that will take the bill's extension straight to the floor for voting, a move that would bypass traditional committee vetting process.

Section 215 expires on June 1. The NSA's mass collection program was revealed by former contractor Edward Snowden, sparking a debate about privacy, security and the reach of government surveillance.

This UPI news item was posted on their Internet site at 9:34 a.m. EDT yesterday morning---and it's courtesy of Roy Stephens.

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Securing Your Assets When Financial Privacy Is Dead

Daily Bell: Hi, Nick. It’s a pleasure to have another opportunity to speak with you. Last time we interviewed you, you dug into the U.S. government’s new FATCA rules and how they will impact Americans who invest outside the country. At, you often deal with the broad topic of privacy. Do you truly believe that Western governments have embarked on a coordinated attack on the private lives of their citizens?

Nick Giambruno: Not only have they embarked, but they have succeeded in killing off financial privacy. But before we go into details of why I say that, it’s important to identify the countries that are and are not responsible for this push, as it gives a clue to the motive. You never hear of financially sound countries, like Switzerland, Singapore, or Hong Kong advocating privacy-killing measures like FATCA. You never hear their governments denouncing the supposed “danger” of tax havens. It’s only the bankrupt states drowning in debt—like the U.S., France, and the U.K.—that have become hostile to privacy. The hostiles have won. Practically speaking, financial privacy is dead.

Given what has happened, it’s only prudent to assume that sooner or later all the details of your financial life will come to rest in a government computer—if they’re not sitting there already. You should plan accordingly. We live in a world where pretty much every penny you earn, save, and spend leaves a permanent record somewhere, and that can be retrieved for scrutiny by government employees at any time.

This interview appeared on the Internet site yesterday---and I thank senior editor Nick Giambruno for passing it around.

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Deutsche Bank sets aside €1.5 billion as Libor settlement looms

Deutsche Bank will take a litigation charge of "approximately €1.5 billion," it said on Wednesday as the German lender nears settlement of claims that it tried to manipulate interbank lending rates.

A resolution of the long-running saga could come as early as Thursday, and the banks total fine is likely to be more than €2 billion, according to people familiar with the situation.

That total would represent the largest penalty meted out so far in connection with the scandal over the manipulation of the London interbank offered rate (Libor) and other interbank borrowing rates.

The above three paragraphs from this Financial Times story from Wednesday are all that were posted in the clear in this GATA release from yesterday---and I thank Chris Powell for posting it.

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The Swiss Franc Is Plunging After Swiss National Bank Comments

As Bloomberg reports, Swiss National Bank says its reduced the group of sight deposit account holders that are exempt from negative rates.

Says negative rates to apply to sight deposit accounts held at SNB by enterprises associated with federal govt, including pension fund PUBLICA.

Accounts will have minimum exemption threshold of CHF10m, to which negative interest does not apply.

Accounts of cantons of Geneva and Zurich, City of Zurich to be wound up---and account of SNB pension fund will also be subject to negative rates.

This Zero Hedge article is definitely worth your while.  It appeared on their website at 8:33 a.m. EDT on Wednesday morning---and it's another offering from reader M.A.  There was also a Reuters story on this posted at the Internet site yesterday---and it's headlined "Swiss central bank reduces exemptions from negative interest rates".

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Ukraine, in snub to Moscow, to adopt British war-time symbol, ditch Soviet war name

Ukraine, in a break with tradition that is certain to rile Moscow, is ditching the Soviet name for World War Two and aims to adopt the poppy, a mainly British wartime symbol, to mark the 70th anniversary of the victory over Nazi Germany.

The moves, signaled by Prime Minister Arseny Yatseniuk on Wednesday, marked an attempt by Kiev to distance itself from Moscow's Soviet-style celebrations, planned for May 9, as the conflict with Russian-backed separatists in eastern Ukraine drags on.

In another break with the Soviet past, Kiev will align its calendar with that of its European allies by adding for the first time May 8 - known in the West as Victory in Europe Day - as a national holiday.

A decree signed by President Petro Poroshenko fixed May 8 as a day for reconciliation between those Ukrainians who fought only the Nazis with those who, after the war, went on to fight Soviet rule also.

My goodness sakes alive, dear reader, how petty/childish can one get?  Of course sociopaths are like that---and I know quite a few.  So do you if you know the checklist for them.  This Reuters article, filed from Kiev, put in an appearance on the Internet site around 7 a.m. EDT yesterday morning---and I thank Jim Skinner for passing it around.

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U.S. uses Ukraine crisis to derail Russia-Germany partnership – Lavrov

Washington’s strategy is to sow discord throughout the world to keep itself in the loop in every region, Russian Foreign Minister Sergey Lavrov told Russian media. The Ukrainian crisis was initiated to prevent an alliance between Russia and Germany.

“Strategically [the U.S.] don’t want to allow a situation in which important regions of the world live and prosper without them, without the Americans. That is why it is important for them to keep people dependent of them,” he said.

The assessment was voiced by Lavrov during a two-hour marathon Q&A session with three Russian radio stations: Echo of Moscow, Moscow Speaks and Sputnik Radio. They were represented by their respective chiefs, Aleksey Venedictov, Sergey Dorenko and Margarita Simonyan, who also heads Russia Today.

The Ukrainian crisis is used by the U.S. to derail Russia’s partnership with the E.U. and particularly Germany, Lavrov stressed.

This right-on-the-money Russia Today news item, which is definitely worth reading, showed up on their Internet site at 3:05 p.m. Moscow time on their Wednesday afternoon, which was 8:05 a.m. EDT in Washington.  It is, of course, courtesy of Roy Stephens.

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Washington prepares for diplomatic war of attrition with Russia

The U.S. reportedly expects that the ongoing confrontation with Russia would continue until at least 2024 and involve many directions. Washington wants to rally support of its European allies to continue mounting pressure on Moscow.

The expected diplomatic and economic war of attrition is being outlined in a Russia policy review currently prepared by Celeste Wallander, special assistant to President Barack Obama and senior director for Russia and Eurasia on the National Security Council, reports Italian newspaper La Stampa. The publication said it learned details of the upcoming policy change from a preview that Washington sent to the Italian government to coordinate the future effort.

U.S. diplomats say Russia changed the cooperative stance it assumed after the collapse of the Soviet Union and is now using force to defend its national interests, the paper said. The change is attributed to the personality of Russian President Vladimir Putin, who, Washington expects, will remain in power until at least 2024.

This is the second story in a row from the Russia Today Internet site.  This one appeared there at 7:26 a.m. Moscow time on their Wednesday morning, which was 26 minutes after midnight in Washington.  It's also courtesy of Roy Stephens.

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E.U. Effort to Punish Gazprom by Retroactive Antitrust Case Absurd – Expert

Ben Aris, editor in chief of Business New Europe magazine, says that the European Union's decision to serve Gazprom with a retroactive an anti-monopoly case is a foolish thing to do, adding that it seems to be a politically motivated decision.

Speaking to Radio Sputnik on Wednesday, Aris explained that while Gazprom's network of fixed pipelines makes it a natural monopoly, and that "from a business point of view, if you introduce new regulations, you can't turn around and implement them retroactively on contracts that were signed in compliance with existing regulations."

Aris noted that even if Gazprom "may have been charging economic rent for some of the gas deliveries…those deals were cut under existing regulations and European countries signed them, agreeing to the prices."

The expert explained that while "it's normal for governments to want to regulate natural monopolies…this should be done at the level of an intergovernmental agreement, rather than introducing legislation and then applying it retroactively."

This very interesting article put in an appearance on the Internet site at 8:05 p.m. Moscow time yesterday evening---and it's also courtesy of Roy Stephens.

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Putin, Hollande to discuss Ukraine, Middle East, Mistrals in Yerevan

Russian presidential aide Yuri Ushakov has confirmed that Russian President Vladimir Putin and French President Francois Hollande will meet during a visit to Armenia’s capital Yerevan on April 24. Ukraine will be one of the main themes in focus.

Also, presidents may discuss the situation in the Middle East and the delivery of Mistral amphibious assault ships to Russia.

"I proceed from the assumption that the theme of Mistrals may be raised during the talks in Yerevan. There are quite a few other issues for discussion, Ukraine in the first place," Ushakov said.

"It is very important for all parties to step up the implementation of the Minsk Accords," he said.

This news story, filed from Moscow yesterday, showed up on the Internet site at 4:15 p.m. local time---and once again I thank Roy Stephens for finding it for us.  It's worth reading.

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Russia Says No to One-World Government

Victor Olevich: Almost a quarter century has passed since the end of the Cold War. Yet, both Russia and the West once again find themselves at the precipice of a new Cold War. Why did Washington choose to pursue an aggressive foreign policy towards Moscow after the Soviet Union dissolved in 1991? Could these developments have been prevented?

William Lind: The Washington establishment, which is bipartisan, thought that now we could rule the world. It could dictate to everyone and it could force its ideology, which is sometimes called globalism or liberal democracy, but is in fact the soft totalitarianism of Brave New World, on everyone in the world. If necessary, with military force. This is the classic hubris that has destroyed one great power after another. There is nothing new about it.  

Victor Olevich:  Why has Washington chosen Ukraine as a battleground in its new Cold War against Russia?

William Lind: Russia under President Putin represents the state system and the way states normally act within the state system, based on their interests. The ideology of the Washington establishment says that is not how the world is going to work anymore.  It is instead going to be essentially a one world government based in Washington. This ideology includes such concepts as the feminist definition of women’s rights, devaluation of all religions, so called gay rights, and the belief that this must be universal.  Russia is saying no to this.  It is saying that it still believes in the state system and is going to pursue its own interests on the world stage.  So when Russia asserted its interests in the face of Ukraine threatening to join NATO, then Washington reacted very strongly.

This is the most important non-gold related commentary in today's column---and if you want to understand the world's power structure as it exists today, then it's definitely a must read.  It appeared on the Internet site early Wednesday afternoon Moscow time---and it's also courtesy of Roy Stephens.

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Morgan Stanley remains bearish on Gold for next 2 years

Greece’s uncertain future in the eurozone, global quantitative easing, loose monetary policies and continued demand out of Asia will all provide much needed support for the gold market, but these factors might not be enough to create another bull market, said Morgan Stanley in a snippet.

Analysts at Morgan Stanley expect prices to fall over the next two years as investors leave the marketplace.

“Our Global Cross Asset team highlight in their report that negative rates will continue to drive flow into USD credit, supporting both the house view of ongoing USD strength and our unchanged generally subdued gold price outlook,” analysts added.

This is the sort of drivel that passes for main stream thinking in the gold market---and I would be prepared to bet some serious coin that they are one of the Big 8 traders in the COMEX futures market that's short precious metals.  It was posted on the Internet site at 9:10 a.m. BST on Tuesday---and I found it on the Sharps Pixley website in the wee hours of yesterday morning.  I had it in lots of time for yesterday's column, but thought I'd save it for today.  Don't believe a word of it.

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Chilean regulator seeks new sanctions against Barrick's Pascua-Lama

Chile's environmental regulator SMA said on Wednesday it will seek new sanctions against Barrick Gold Corp's massive Pascua-Lama gold and silver project, complicating the possibility that the suspended mine might resume construction.

The regulator already fined Barrick $16 million in May 2013 for not complying with some of the country's environmental requirements at Pascua-Lama, which was put on hold indefinitely in October 2013.

Inspections that took place between 2013 and 2015, some of which were scheduled and others triggered by complaints from the local community, had revealed 10 new infractions, the SMA said.

This short Reuters article put in an appearance on their website at 5:39 p.m. EDT yesterday---and it's another gold-related story I found on the Internet site.

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No Such Thing As a Sure Thing—But Sometimes It’s Close: Louis James

In the investment world, there’s no such thing as a sure thing, and if anyone tells you they have such an investment, you should run the other way. Fast. But sometimes, the odds are so clearly stacked in one direction that it comes pretty close.

How can one be so sure? Due diligence, of course; the devil is in the details—and so is the profit.

It’s impossible to illustrate this without tooting my own horn a bit, so please bear with me on that. The point of the story is critical to investments in all sectors and should help you with your own.

My sector—my specialty—is mining. I’ve been kicking rocks around the world for more than a decade now, learning geology and engineering and metallurgy from world-class experts in their fields. But the point is to make money, not just to figure out nature’s geological puzzles, so I’ve also immersed myself in the world of legendary investors, learning all I can from their successes and failures.

The result is that I now have an encyclopedia of mineral exploration and exploitation projects in my head, as well as experience with thousands of companies in the field—and the outcomes of their efforts. This enables me to very quickly sort the wheat from the chaff.

This commentary by Casey Research's own Louis James appeared on the CR website yesterday sometime---and it's worth reading.

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China’s Stealth Gold Reserves to Quadruple as IMF Seek Answers

Enter the Dragon.

China’s push to challenge U.S. dominance as the global economic superpower and to challenge the dollar as a global reserve currency involves gold – “a lot of gold.”

China may soon make public that it has quietly accumulated a massive hoard of gold in recent years. This was done in order to bolster their bid to have the yuan included in the basket of currencies that make up the IMF’s Special Drawing Rights (SDRs) according to an article by Bloomberg.

This is something Jim Rickards, ourselves and many analysts in the gold sector have said would happen for some time. The People’s Bank of China’s (PBOC) quiet ongoing accumulation of gold is something we frequently cover as we believe it is an important demand factor in the market that is largely ignored by most analysts and in most coverage of the gold market.

Everything in this commentary by Mark has already been posted in my column over the last couple of days, so there's nothing really new here.  But Mark looks at the stories through different eyes---and for that reason, his commentary on them is worth you while.  It was posted on the Internet site yesterday.

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Downwards price manipulation of gold to Asian buyers’ big advantage -- Julian Phillips

It is felt by many that the gold markets are manipulated. The direction of this manipulation is downwards, or just to hold the gold price at current levels.  Certainly it appears that the banking system in the developed world is getting a big advantage in this. On the other side we have a most extraordinary picture. Chinese and Indian demand alone has in the last two years exceeded newly mined gold supplies. That’s around 3,300 tonnes. And Asia is getting it all, at prices down 37.5% from its peak level. Doesn’t this strike you as odd?

Demand such there has never been seen before emanating out of Asia, is not driving up prices? Instead they are getting all this gold at a deep discount? Who’s really getting the big advantage? Why should Asia want to see higher prices? When you can get the entire available stock that comes to the market at these prices, why chase prices?

As it is, more and more mines in South Africa and elsewhere in the world are being taken over by the Chinese. The production of these mines goes straight to China and not through the London and New York markets. It means the physical volumes of gold going through London and New York are shrinking but still enough to allow these markets to keep prices low.

This brief commentary by Julian appeared on Lawrie Williams' website yesterday---and it's certainly worth reading.

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BIS president in 1981: We've got to start rigging the gold market

"Regulating the gold price in the free market" was recommended to central banks by the president of the Bank for International Settlements," Jelle Zijlstra, in a speech at International Monetary Fund headquarters in Washington in September 1981.

The speech, located this week by gold researcher and GATA consultant Ronan Manly, was given as a lecture memorializing the former managing director of the IMF, Per Jacobsson.

Those who follow GATA may recall that Zijlstra, who was president of the Netherlands Central Bank simultaneously with his holding office at the BIS, wrote in his memoirs in 1992 that the price of gold long had been held down by central banks at the behest of the United States, which sought to minimize competition for the dollar as the international reserve currency:

In his speech at the IMF in 1981, Ziljstra said: "I feel that it is necessary for us, within the Group of Ten and Switzerland, to consider ways to regulate the price of gold, admittedly within fairly broad limits, so as to create conditions permitting gold sales and purchases between central banks as an instrument for a more rational management and deployment of their reserves."

Ziljstra added: "On the occasion of the annual meeting of the IMF in Belgrade in 1979 this was brought up, but regrettably, insufficient agreement could be reached to make even a modest start with regulating the gold price in the free market. It is my conviction that relatively small-scale interventions, though not forestalling the subsequent explosion in the gold price, would at least have reduced it to more manageable proportions. Now that the turbulent emotions seem to have quieted down, we would be wise to reflect anew and without prejudice on these subjects."

This absolute must read GATA release appeared on their website yesterday.

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Apr 22, 2015

Fed still wants easy money and any rate increases will be trivial

Janet Yellen wants you to know that while the era of zero rates may be drawing to a close, money will stay cheap for a long time to come.

The Federal Reserve chair and her colleagues have stressed in recent speeches that monetary policy will remain unusually easy after they begin to tighten this year for the first time in almost a decade. They are telling investors that the pace of increases is more important than the liftoff date.

"This should be the slowest tightening cycle since the funds rate became the policy instrument of choice" in 1982, said Roberto Perli, a former Fed official who is now a partner at Cornerstone Macro LLC in Washington.

Policy makers have ruled out an increase at the next meeting of the Federal Open Market Committee, April 28-29. New York Fed President William C. Dudley stressed on Monday that once they start to lift rates above zero, "we will simply be moving from an extremely accommodative monetary policy to one that is only slightly less so."

This Bloomberg news item appeared on their Internet site at 10:00 p.m. Denver time on Monday evening---and I found it embedded in a GATA release.

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Fed's Bill Dudley is alert to global liquidity storm, yet signals 3.5pc rates

The U.S. Federal Reserve will do its best to avert a bloodbath for emerging markets as it prepares to raise interest rates for the first time in eight years, but warned that it cannot let inflationary pressures take hold in the U.S. itself.

Bill Dudley, head of the powerful New York Fed, acknowledged that the institution has a special duty of care for the whole world, vowing to act with caution to soften a potentially brutal squeeze for borrowers holding record levels of dollar debt outside the U.S.

"The normalisation of U.S. monetary policy could create significant challenges for those emerging market economies that have been the recipients of large capital inflows in recent years," he said.

"We at the Fed take the potential international implications of our policies seriously. In part, this is out of simple self-interest, since the international effects of Fed policies can spill back onto the U.S. economy and financial markets. In part, too, it reflects a sense of special responsibility we have given the dollar’s role as the international reserve currency."

This commentary by Ambrose Evans-Pritchard appeared on the Internet site at 7:37 p.m. BST on Monday evening, which was 2:37 p.m. EDT in Washington---and it's the first contribution of the day from Roy Stephens.

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Chatty Former Chairs Turn Up Fed Policy Noise

Paul Volcker is the latest former Federal Reserve chairman to chime in on central bank policy.

Mr. Volcker on Monday lamented the Fed’s large balance sheet, which grew rapidly after the 2008 financial crisis when Ben Bernanke was chairman and Janet Yellen was vice chairwoman. The Fed’s portfolio of assets grew to around $4.5 trillion from less than $1 trillion in recent years through three rounds of bond-buying aimed at spurring stronger economic growth.

“The Federal Reserve should not be so dominant in the markets,” Mr. Volcker told The Wall Street Journal after a press conference detailing his recommendations for financial regulatory reform.

His comments come less than a week after Mr. Bernanke suggested in his blog that the Fed should consider maintaining a large balance sheet. “I wonder if the case for keeping the balance sheet somewhat larger than before the crisis has been adequately explored,” he said.

This worthwhile commentary put in an appearance on the Internet site on Monday afternoon EDT---and I found it yesterday's edition of the King Report.

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Harley Davidson's new warning resonates with a lot of America's biggest companies

When iconic motorcycle maker Harley-Davidson Inc warned on Tuesday that discounting from foreign rivals would dent its profits, the message resonated beyond the motorcycle business.

From cars to construction equipment, the impact of the strong dollar is a big problem for U.S. companies selling overseas. But the U.S. dollar's recent surge to multi-year highs against major currencies, such as the euro and yen, has also become a challenge to their efforts to protect market share on home turf.

Harley's U.S. market share slipped nearly five percentage points in the first quarter to 51.3 percent as competitors offered discounts of up to $3,000 per bike and slashed suggested retail prices by up to 25 percent.

Honda Motor Co Ltd and Suzuki Motor Corp both currently offer $1,000 cash back on selected models.

This Reuters new item, filed from Chicago, appeared on the Internet site at 6:57 p.m. CDT yesterday evening---and I thank Roy Stephens for sliding it into my in-box just before 2 a.m. EDT this morning.

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Is Berkshire Hathaway ‘too big to fail?’

U.K. regulators want Warren Buffet’s Berkshire Hathaway classified as ‘too big to fail.’ FOX Business Contributor Bob Rice breaks down what this means for the reinsurance business and your bottom line.

This 3:32 minute CNBC video interview is well worth your time---and it's the second offering of the day from Dan Lazicki.

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Oil Drops After API Inventories Show Builds Accelerating Again

After last week's smaller than expected API and DOE inventories data (which was merely average when considering the massive build from the prior week), it appears the machines have realized that everything is not awesome again in the crude complex. For the 15th week in a row, inventories rose - this time by more than expected at 5.5mm bbl (against a 2.5mm bbl expectation). Crude prices are slipping lower.

This tiny Zero Hedge article appeared on their website at 4:38 p.m. EDT yesterday---and the three embedded charts are worth the trip.  I thank Dan Lazicki for this story as well.

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CFTC Charges U.K. Resident Navinder Singh Sarao and His Company Nav Sarao Futures Limited PLC with Price Manipulation and Spoofing

Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the unsealing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois against Nav Sarao Futures Limited PLC (Sarao Futures) and Navinder Singh Sarao (Sarao) (collectively, Defendants).  The CFTC Complaint charges the Defendants with unlawfully manipulating, attempting to manipulate, and spoofing — all with regard to the E-mini S&P 500 near month futures contract (E-mini S&P). The Complaint had been filed under seal on April 17, 2015 and kept sealed until today’s arrest of Sarao by British authorities acting at the request of the U.S. Department of Justice (DOJ).  After the arrest, the DOJ unsealed its own criminal Complaint charging Sarao with substantively the same misconduct. 

The Standard & Poor’s 500 Index is an index of 500 stocks designed to be a leading indicator of U.S. equities.  The E-mini S&P 500 is a stock market index futures contract based on the Standard & Poor’s 500 Index and is one of the most popular and liquid equity index futures contracts in the world.  The contract is traded only at the Chicago Mercantile Exchange (CME). 

This press release was posted on the CFTC's website yesterday---and it's worth reading.  There was a brief 1:07 minute video clip about this on CNBC yesterday afternoon---and the headline there reads "U.K. trader charged for manipulation contributing to 2010 flash crash".  I thank Karen Nelson for bringing this story to our attention.  That paragon of virtue Bart Chilton had something to say about this as well in a 1:49 minute CNBC video clip headlined "Bart Chilton: Don't think charged trader 'sole culprit'"---and that was courtesy of Dan Lazicki.

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This tiny European state may trigger a Grexit

Finland's rigid stance over euro zone bailouts could become even more hardline after the weekend's election, in what would be a further blow to beleaguered Greece as it tries to avert a default.

A parliamentary election on Sunday in the small, northern euro zone state was won by the opposition Centre Party's Juha Sipila.

He may have to rely on the euro-sceptic Finns Party for support to form a coalition government – a development that analysts say raises risks to the future of the euro area. The Finns Party is against sovereign bailouts and wants to boot Greece from the 19-member euro zone.

"Finland was in the anti-bailout camp before yesterday's election and it's now likely to take an even harder line towards Greece," Nicholas Spiro, managing director at Spiro Sovereign Strategy, told CNBC.

I had a story about his in yesterday's column, but it didn't reflect the outcome of the Finnish elections on Sunday.  This CNBC story from 6:03 p.m. EDT on Monday evening does that---and it's something that Roy Stephens sent our way on Tuesday morning.  He also dug up a Russia Today commentary from yesterday on this issue headlined "Finland: Exhibiting strain of northern independence".

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Lenders Awash With Euros Pay Banks and Governments to Take Loans

Euros are so abundant thanks to Mario Draghi’s easy monetary policy that banks are starting to pay each other to get the cash off their balance sheets.

For the first time, an index of three-month interbank loans in euros fell below zero on Tuesday. Elsewhere, the Spanish government raised funding for the same period of time and got paid to take the money.

They’re the latest signs that the efforts by the European Central Bank President to get cash flowing into the economy are starting to percolate through markets. The plan is for the cheap money created by ECB bond purchases -- known as quantitative easing -- finally to boost growth and stave off deflation.

“It’s good news for borrowers, not so good news for lenders,” said Ciaran O’Hagan, the Paris-based head of European rates strategy at Societe Generale SA. “Mr. Draghi wants us to spend the cash. The purpose of QE is to get us to take on some risk.”

This Bloomberg article put in an appearance on their Internet site at 3:12 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for bringing it to our attention.

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Greek bank shares slide to record low as ECB considers pulling the plug

Shares in Greece's stricken banks fell to an all-time low on Tuesday amid fears the European Central Bank was planning to finally pull the plug on the country's lenders.

Banks stocks fell by 4pc on the news that ECB staff had drawn up a memo which proposed limiting the emergency assistance (ELA) that has been keeping lenders alive since the Syriza-led government entered office at the end of January.

Tuesday's trading helped cap off a torrid run which has seen more than 50pc wiped off the value of Greece's lenders since the start of the year.

This news item showed up on The Telegraph's website at 6:00 p.m. BST yesterday evening---and It's another offering from Roy Stephens.

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Hungary, Greece, Cyprus to Restart Food Trade With Russia Despite Sanctions

Hungary, Greece and Cyprus may soon be allowed to export fruit and vegetables to the Russian market, according to a report in the newspaper Rossiyskaya Gazeta.

Russian health authorities are conducting audits of suppliers in all three countries, as well as India, Alexey Alexeyenko, the director of Rosselkhoznadzor (the Russian Federal Service for Veterinary and Phytosanitary Surveillance) is quoted as saying.

"About 20 companies will be verified in Greece and Hungary. In India — less, around four to five. Cyprus has requested a delay for technical reasons and therefore, the audits will begin on April 27, where seven to eight companies will be checked."

Greek Prime Minister Alexis Tsipras met Russian President Vladimir Putin in Moscow in early April and it is understood agricultural trade was discussed.

This story appeared on the website at 1:28 p.m. Moscow time on their Monday afternoon, which was 6:28 a.m. EDT in New York.  Once again I thank Roy Stephens for finding it for us.

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19 Reasons Why You Should Never Visit Iran

No doubt you’ve heard a lot about Iran in the media. And it’s true, Iran is a truly evil and terrifying place. Here we present 19 reasons you should never, ever, visit this godforsaken land.

To tell you the truth, dear reader, two countries I'd love to spend some serious time in are Iran and neighbouring Turkey.  There's just so much history---and so much culture.  And I'd bet serious money that they people that live there are wonderful as well.  The pictures I would take!!!  This must read photo essay appeared on the Internet site.  I thank Nitin Agrawal for passing it around yesterday.

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Unprecedented development ahead for renminbi

The Bank of China's chief economist Cao Yuanzheng feels China's efforts to promote the renminbi (RMB) as an international currency is blazing a new trail in world history.

"I think this is an unprecedented process in economic history," Cao said in an exclusive interview with Xinhua on the sidelines of the "RMB: Going Global. The Bank of China Renminbi Internationalization Forum".

Renminbi development may be unprecedented but carefully mapped out nevertheless. In his remarks during the forum, Cao said the process has its roots back in the 1990s, and the veteran economist said he still believed it would take several more years for the level of international convertibility of the currency.

"I now think we can speak in terms of years and not decades," Cao said. "I cannot predict the time table, but I think we'll get there before 2020."

This news item, filed from Rome, appeared on the Internet site on Saturday---and I found embedded in an article posted on the Internet site via a GATA release yesterday.  It's worth reading.

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Japan Breaks 48-Month Deficit Streak, Manages Marginal Trade Surplus on Collapse in Imports

After 48 months of trade deficits, March saw a very modest ¥3.3bn surplus (vs. a ¥409bn deficit expectation), driven by a collapse in imports. Exports rose 8.5% (as expected) but against already dismal expectations of a 12.6% drop, March saw Japanese imports crash by 14.5% - the most since Nov 2009 (driven by the plunge in oil prices - alleviating some of the post-Fukashima fuel demands cost). Of course this is terrible news for stocks as it means less stimulus from the BoJ...and the yen is strengthening modestly.

This is another tiny Zero Hedge story with three embedded charts.  It appeared on their Internet site at 8:05 p.m. EDT yesterday evening---and it's courtesy of Dan Lazicki.

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Wall Street Has No Idea How Much Money Venezuela Has

Bond investors suspect the Venezuelan government is pretty low on cash. Just how low, though, is a tricky question.

After all, this is a country that has stopped releasing even the most basic economic data -- things like inflation and government spending -- on a timely basis.

Given how high the stakes are, with many investors bracing for an imminent default, Wall Street analysts are scrambling to fill the void. Firms including Bank of America Corp. and Barclays Plc have created their own statistical series to try to help investors understand how dire the country’s cash squeeze is. It’s a challenging exercise, they say.

This very interesting article showed up on the Bloomberg website at 7:56 p.m. MDT on Monday evening---and it's the second contribution of the day from Elliot Simon.  The original headline read "Wall Street is refusing to accept Venezuela's blackout of data".

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N.Y. apartments, art store wealth better than gold now, BlackRock chairman says

Gold’s traditional role as a store of wealth has been usurped by contemporary art and apartments in cities such as New York and London, according to Laurence D. Fink, head of the world’s biggest asset manager.

“Historically gold was a great instrument for storing of wealth,” the chairman of BlackRock Inc. said at a conference in Singapore on Tuesday. “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted.”

Over the centuries, bullion traditionally lured demand as a protection of wealth during crises, including conflicts and periods of inflation. Prices posted the first back-to-back annual drop last year since 2000 as investor holdings in exchange-traded products contracted, global equities rallied and the dollar climbed on prospects for higher U.S. interest rates. Since peaking in 2011, it’s dropped about 38 percent.

“The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

And as Chris Powell said in the preamble to this Bloomberg story in his GATA release---"If only someone had asked him why gold has lost its sheen. But that would have required actual journalism."  Amen to that bro!  This article showed up on their website at 11:48 Mountain Daylight Time on Monday evening.

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Book tells of Germany's foreign-vaulted gold and the campaign to bring it home

A book chronicling the German gold repatriation campaign, written by its leader, Peter Boehringer, has just been published. It's titled "Holt Unser Gold Heim: Der Kampf um das Deutsche Staatsgold," which is roughly "Bring Our Gold Home: The Struggle over the German State's Gold."

In addition to the history of the gold repatriation movement, the book reviews the history of postwar Germany's vaulting much of its gold abroad and explains gold's crucial and enduring if unappreciated place in the world financial system.

This short GATA release was posted on their website on Tuesday afternoon EDT.

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Currency Wars Back as Russia Buys One Million Ounces of Gold in March -- Mark O'Byrne

Russia increased its gold holdings by one million ounces in March, bringing its total reserves to nearly 40 million ounces or 1,238 metric tonnes. The Russian one million ounce gold purchase is a large one even by Russian standards as in recent years they have consistently been buying roughly 300,000 ounces per month.

It followed a two month break from the gold market which had led to erroneous speculation that Russia was not interested in increasing its gold reserves any further.

Since 2005, Russia’s gold reserves have increased three-fold. As a comparison, in the second quarter of 2009, Russia only had 550 tonnes of gold in its official reserves meaning that their reserves have doubled in recent years.

The 1 million ounce gold buy in March by The Central Bank of the Russian Federation was certainly in the news Monday and yesterday---and here's Mark's comments on it as posted on the Internet site yesterday.

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Russian central bank gold buying back with a vengeance -- Lawrence Williams

According to a Russian central bank announcement on its latest gold reserve position it appears that it added 1 million ounces of gold (31.1 tonnes) to its holdings in March after a two month hiatus, bringing its total reserves to 39.8 million ounces (1,237.9 tonnes). There had been speculation that the nation had been cutting back on its gold purchases due to the economic difficulties it had appeared to face due to the falling oil price and western sanctions.  However the lack of any increase in the early months of the year is a pattern we have seen before – but now the March rise is the highest seen since last September when the bank added 1.2 million ounces (37.3 tonnes) which itself was the largest monthly total in 16 years. The big March gold reserve rise could thus be a signal that the Russian central bank is strongly back on its gold buying spree.

The news of the latest Russian gold reserve addition confirms the World Gold Council prediction that overall central bank gold reserve rises will continue at a strong rate this year – and there is also speculation by Bloomberg that China may also confirm a big rise in its reserve by as much as 2,500 tonnes or more in the months ahead as it jockeys to try and have the yuan accepted by the IMF as a part of the make-up of a revised Special Drawing Rights basket – although as we have pointed out here before this is something which could be vetoed by the U.S. as not being in its interest given its 16.75% blocking voting interest in significant IMF decisions.

This commentary by Lawrie on Russia's gold purchase was posted on the Internet site late yesterday morning in London---and it's worth reading as well.

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